Lecture 7

Lecture 7 - Macro 1 Classical School 2 Keynes 3 Macro Obj 4...

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Macro 1. Classical School 2. Keynes 3. Macro Obj. 4. Macro Policy 5. Circular Flow 6. AS/AD 7. Macro Measures 1. Classical school Intro to class up to the midterm, adam smith classical school Great depression split economics into micro and macro Fallacy of composition – micro vs macro Micro is the traditional classical school economics 70’s reintegration of both economics – 2. Keynes 2 UCLA economists translated Keynes language to the classical/mathematical school Keynes agrees with invisible hand and etc but he does not care about the long run because we won’t be alive He focuses on short run intervention Arthur Okun Chinese may have a lower average income but they have a higher disposable income 40, 50’s Keynesian economics started, grew in 60’s, 70’s-80’s comparison group (Milton freeman) challenged Keynes (moved back to micro, government butt out) Rational expectation school and supply side of economics, 80s-90s Keynesian started to work and gave birth to New Keynesian economics Macroeconomics is still an unsettled science 1A – inflation
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Lecture 7 - Macro 1 Classical School 2 Keynes 3 Macro Obj 4...

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